Institutional planning slows, commercial activity climbs

by Christopher Brinckerhoff | July 24, 2024 6:00 am

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The Dodge Momentum Index (DMI)[2], issued by Dodge Construction Network, increased 2.7 percent in May to 179 from the revised April reading of 174.3. Over the month, commercial planning progressed 5.5 percent, and institutional planning slowed by 3.4 percent.

Sarah Martin, associate director of forecasting at Dodge, says, “Owners and developers are gaining confidence in 2025 market conditions, alongside more stable and predictable interest rates, spurring stronger commercial activity over the month. Conversely, after last year’s growth, institutional planning is decelerating, as high material costs, labor shortages, and elevated interest rates seep into planning decisions. The overall DMI remains 40 percent higher than May 2019 levels, indicating a steady pipeline of construction projects that will be ready to break ground through mid-2025.”

Data center planning supported growth on the commercial side of the index in May, alongside a steady acceleration in retail planning over the last six months. Marginal increases in project activity were also seen in hotel and warehouse planning. For the third consecutive month, health care and education planning activity slowed, constraining total institutional planning momentum. Public project planning activity also slackened in May, while the value of amusement planning projects has been picking up speed recently. In May, the DMI was 7 percent lower than year-ago levels, following an abnormally strong May 2023. The commercial segment was up 8 percent from year-ago levels, while the institutional segment was down 32 percent over the same period.

Source URL: https://www.metalarchitecture.com/news/institutional-commercial-activity/

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